There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Lumber Liquidators Holdings Inc (NYSE:LL).
Lumber Liquidators Holdings Inc (NYSE:LL) investors should be aware of a decrease in enthusiasm from smart money of late. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Titan International Inc (NYSE:TWI), Hometrust Bancshares Inc (NASDAQ:HTBI), and Kimball International Inc (NASDAQ:KBAL) to gather more data points.
Follow Ll Flooring Holdings Inc. (NYSE:LL)
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Now, let’s analyze the key action surrounding Lumber Liquidators Holdings Inc (NYSE:LL).
What have hedge funds been doing with Lumber Liquidators Holdings Inc (NYSE:LL)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, QVT Financial, managed by Daniel Gold, holds the number one position in Lumber Liquidators Holdings Inc (NYSE:LL). QVT Financial has a $11.9 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is MAK Capital One, led by Michael Kaufman, holding a $3.5 million position; 3% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish comprise Ken Griffin’s Citadel Investment Group, Charles Paquelet’s Skylands Capital and Michael Zimmerman’s Prentice Capital Management.
Judging by the fact that Lumber Liquidators Holdings Inc (NYSE:LL) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers that slashed their positions entirely last quarter. It’s worth mentioning that Clint Carlson’s Carlson Capital dropped the largest position of the “upper crust” of funds watched by Insider Monkey, worth about $12.8 million in stock. Julian Robertson’s fund, Tiger Management, also said goodbye to its stock, about $4.9 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to Lumber Liquidators Holdings Inc (NYSE:LL). We will take a look at Titan International Inc (NYSE:TWI), Hometrust Bancshares Inc (NASDAQ:HTBI), Kimball International Inc (NASDAQ:KBAL), and Landauer, Inc. (NYSE:LDR). This group of stocks’ market values are similar to LL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TWI | 19 | 77880 | 3 |
| HTBI | 9 | 43590 | 0 |
| KBAL | 9 | 24692 | -2 |
| LDR | 7 | 49025 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $32 million in LL’s case. Titan International Inc (NYSE:TWI) is the most popular stock in this table. On the other hand Landauer, Inc. (NYSE:LDR) is the least popular one with only 7 bullish hedge fund positions. Lumber Liquidators Holdings Inc (NYSE:LL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TWI might be a better candidate to consider a long position.
